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Indy ranks high for jobs in foreign-owned businesses

Maureen GroppeGannett Washington Bureau
11:51 a.m. EDT June 20, 2014

British manufacturer Rolls-Royce has its largest engine-manufacturing operation in Indianapolis, this $42 million, 81,500-square-foot plant on Indianapolis’ Southwestside. It also operates a plant on the Westside.
(Photo:
Matt Detrich / The Star
)

“It's a good validation as to what we probably intuitively already knew,” said Marty Vanags, vice president for regional economic development for the Indy Chamber. “We have to look at the marketplace from a global perspective. If we don’t, we’re selling ourselves as a region short.”

The benefits of foreign investment go beyond jobs, according to the report. Wages tend to be higher than the average among all jobs. The companies conduct more research and development, make more capital investment and export more goods.

The report is encouraging, said Marc Lotter, spokesman for Indianapolis Mayor Greg Ballard, and supports what Ballard has been doing to promote Indianapolis as a global economic hub. That includes helping lead about two dozen international trade missions, doubling the number of Indianapolis’ sister-city relationships, and backing cultural festivals, which Lotter said can make the city a more welcoming place for foreigners.

“Mayor Ballard understands Indy must be connected to the global economy or we won’t grow as a city,” Lotter said. “That includes efforts to help Indy companies expand and do more business overseas, making it easier for our companies to attract talent from around the world, and encourage investment by international companies in our city.”

Jobs in foreign-owned businesses are concentrated in manufacturing, representing about one-fifth of all manufacturing jobs in the U.S.

So its not surprising that Indiana, where the economy is more dependent on manufacturing than in any other state, would rank higher than many other states in the number of jobs from foreign businesses: 14th highest with 145,645 jobs.

Above its weight class

The share of private employment jobs in Indianapolis coming from foreign companies increased from nearly 4 percent in 1991 to 6.5 percent in 2011, the 7th biggest increase among the largest metro areas.

“Indianapolis definitely punches above its weight,” said Nick Marchio, senior research assistant at the Brookings Institution and report co-author. “Indianapolis seems to be leveraging its competitive advantage to the point where they're attracting some of the most globally competitive firms in the world.”

The British manufacturer Rolls-Royce has its largest engine-manufacturing operation in Indianapolis.

Last year, the company opened a $42 million, 81,500-square-foot plant on Indianapolis’ Southwestside to make compressor parts used in its T56 jet engines. The engines are used in many military and civilian airplanes. It also operates a plant on the Westside.

But Rolls-Royce announced in January that it was cutting more than 260 jobs in Indianapolis as part of a global workforce reduction of its defense business. At the time, Rolls-Royce employed 4,000 people in Indianapolis.

Smaller Indiana cities fare well

Although the Brookings report ranks only the largest metro areas by foreign investment, it notes that the manufacturing-oriented small metro areas of Columbus and Kokomo have particularly high concentrations of jobs from foreign employers.

One of five private sector jobs in Kokomo came from foreign-owned businesses in 2011 and about one in four did in Columbus.

The only higher concentration in Indiana is in Greenburg, where 27 percent of the jobs came from foreign-owned companies thanks to the Honda plant there.

Most of Toyota’s lift trucks sold in the U.S. are made in Columbus at a plant that opened in 1990. Last year, Toyota Material Handling moved its North American headquarters from California to Columbus.

Chrysler, owned by Italian automaker Fiat, employs thousands of Hoosiers at its three transmission plants and a casting plant in the Kokomo area.

Vanags of the Indy Chamber said the Brookings report is helpful because economic developers are always trying to compare themselves to one another, and because the report can help justify activities to attract new development.

“Every major and minor economic development organization has to look at today’s environment and say, ‘Where am I going to get our next hundred jobs? Where are we going to get our next million dollars in capital investment?’ ” Vanags said. “Just to be looking over your neighbor's fence and picking the apples off the tree from the branch you can reach really doesn't make a lot of sense.”

Brookings, along with JP Morgan Chase, is working with a number of metro areas to boost foreign investment. Indianapolis was one of the eight metro areas chosen last fall to help local companies market their goods and services around the world. Ballard has said the Global Cities Initiative will help local companies penetrate the world marketplace and show international companies why they need to open offices in Indianapolis.

Contact Maureen Groppe at mgroppe@gannett.com or @mgroppe on Twitter.

Foreign investment in Indy

• Indianapolis jobs in foreign-owned businesses in 2011: 49,910

Rank among 100 largest metro areas: 22nd

• Share of total private employment in foreign-owned businesses in 2011: 6.5 percent